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1 How to Build a $1000 Emergency Fund in 90 Dayshttps://www.jackiebeck.com/1000-emergency-fund-in-90-days/
https://www.jackiebeck.com/1000-emergency-fund-in-90-days/#commentsThu, 21 Feb 2019 21:36:30 +0000https://www.jackiebeck.com/?p=12145Wish you had an emergency fund to fall back on? This step-by-step guide walks you through exactly how to build a $1,000 emergency fund in 90 days or less. (And you don’t have to be rich to make it happen.) But first, a quick story: “Your house needs a new air conditioner,” they said. I […]

]]>Wish you had an emergency fund to fall back on? This step-by-step guide walks you through exactly how to build a $1,000 emergency fund in 90 days or less. (And you don’t have to be rich to make it happen.)

But first, a quick story:

“Your house needs a new air conditioner,” they said. I couldn’t believe it, or afford it if that were true. So I roasted in the 105+ degree Phoenix heat while I saved up $35 for a second opinion. (Yeah, I was pretty broke, and determined not to borrow.)

If only I’d known then what I know now about saving up money fast. I’d have had at least a $1000 emergency fund to draw from like I do now.

If you’d like to learn how to build a $1000 emergency fund in 90 days or less, read on!

Step 1: Let go of any limiting beliefs.

If you already believe it’s possible to save up $1000 in 90 days or less, you’re starting off from a great place and can skip to step 2. But if you have any doubts or find yourself thinking “oh but I can’t do that because ______”, this part is for you.

Trust me, I know what it’s like to be struggling to make ends meet. I tried and failed to save a single dollar for the longest time, feeling like a loser when I’d withdraw it. But it is possible for things to change, and get better so that you can save. Believing that and getting rid of the “can’ts” is the first step.

If you catch yourself thinking or saying “I can’t because….”, tell yourself “stop!” instead. (Out loud even!) Then reframe it to something you can believe. That might be, “I may not see how I can save up just yet, but I’m getting closer to making it happen every day.” Or “I’m not going to dwell on that. Right now I’m going to focus on finding ways to do it anyway.” (Then mentally change the subject.) Work on that while you go on to step 2.

Step 2: Pick a place to park your $1000 emergency fund.

If you already have an account open for your emergency fund, you can skip to step 4. But if you’re not sure where to put your emergency fund, read on…

People sometimes spend way too much time agonizing over where to put their emergency fund. The thing is, it truly doesn’t matter all that much so long as you pick somewhere that’s safe and without fees.

If you’re starting from zero like I did, even a piggy bank, old purse, or jar that you hide away in the house will work until you can get an account set up somewhere.

Don’t worry about interest rates, earning money with it, and or investing it. (Definitely don’t invest it.) The goal isn’t to make money with an emergency fund; it’s to prevent debt and provide safety. Think of it as an investment in your peace of mind instead.

How do you know if someplace is safe to put your emergency fund?

If you’re in the US, look for a bank or credit union that’s insured by the FDIC or NCUA. Most of them are, and they’ll have a sign on their door and a notice on their website saying so. If they don’t charge you a fee to have a savings account with them, open one up and be done with it. It’s also good to make sure you’re able to easily add money to your account.

Stop right now and open a savings account for your soon-to-be $1000 emergency fund. Here are the ones I use:

If you want a super easy way to both open a savings account and to start automatically saving, I use and recommend Digit. (Digit is totally my favorite way to automatically build savings.) To use Digit, you’ll need a checking account and a phone you can text with. Read the review for more details on how it works.

If you absolutely don’t want to open your emergency fund savings account right this very moment, at the very least add it to your calendar now and commit to doing so within the next 7 days. It won’t take long and is very important. No matter what, pick a safe place to park your emergency fund.

Step 3: Start the savings process.

If you opened an account with Digit, it will start saving for you automatically within the next few days once it’s had time to analyze your typical spending, so you won’t have to do anything to start the process there. (But you may need to speed it up to meet your 90 day goal if it’s not saving as much as you’d like. Don’t worry, you can easily transfer money there yourself too with just a text.)

If you chose another place to save, you’ll need to start the process by manually sending money to it. Send at least $1 so you’ve got it started.

Step 4: Customize the plan to fill your $1000 baby emergency fund.

Let’s think about this a minute. $1000 within 90 days breaks down to just over $11.11 per day. That’s the amount you need to set aside to reach your $1000 baby emergency fund goal.

If that amount sounds completely doable to you right now…

Mark your calendar to do a transfer to your emergency fund every day for the next 90 days. (Of course, you can do it in bigger chunks & fewer transfers instead if that’s easier, but it can be motivating to watch your fund grow on a daily basis too.)

If you’re not sure where to get the money yet, spend less and/or make more

There are two ways to go about it, and you can do a combination of both to get to that $11.11 a day. You can: spend less and/or earn more.

Let’s talk about spending less first.

Start by considering your current situation. How much do you typically spend in a day right now, and what are you spending it on? If aren’t sure (most people aren’t!) track your spending for a day or two — starting now — to get an idea.

Tracking your spending is not complicated. All you need is a piece of paper or a note app on your phone. When you buy something, write down what it was and how much it cost. Ask yourself if you’d rather have that, or more money in your emergency fund. Remember, this is only for a short time! You’re not giving up whatever it is forever, and whether or not you even give a particular thing up temporarily is completely up to you.

While you’re at it, look at big monthly budget items too. What are your typical bills like each month? Maybe there’s one or two you could cut back on, get better deals on, or put on vacation hold temporarily.

You’re aiming for a total of $333.30 a month that you can send to savings instead of bills, which can sound like a big chunk. But it could just require making a few adjustments, depending on where you’re starting out from. If $333.30 sounded huge to you, and you just don’t have anywhere to cut back (or even if you’d just like ways to get your $11.11 a day faster) it’s time to talk about the flip side of things: making more money.

Making more money is a great way to reach all of your financial goals faster.

Making more money is a great way to reach all of your financial goals faster, including this critically important one of getting a starter emergency fund in place.

I know, you’re probably busy and maybe even exhausted. The good news is…you can still make some extra money. Especially since your immediate aim is to make as little as $11.11 a day, for a total of $1000. The basic ways of making more money are:

Getting a raise or a better job (ideal for the long term!)

Getting paid overtime at your current job

Taking on a part-time or temporary job

Doing extra work on the side (side gigs like dog walking, baby sitting, etc.)

Selling things you already own

Remember, you’re not looking for the ideal situation. You’re looking for something — or a combination of somethings — that will get you to your goal of $1000 within 90 days. Do not spend money to make this happen.

If you’ve got a neighborhood group on Facebook or are on Nextdoor, let folks know you’re looking for odd jobs and tell them the skills you have or things you could help with. Knock on doors if you have to. People need help with things like pulling weeds, cleaning baseboards, putting up decorations, changing lightbulbs, you name it.

If you need work you can do from home, you could write blog posts for people, baby- or pet-sit at your house, do Pinecone surveys, etc. Get creative and remember that every dollar gets you that much closer to your goal. (When you’re tired, remember that this is a sprint and that it’s not forever.)

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Keep this in mind as your emergency fund grows.

As you begin making progress and transferring money to your emergency fund, it’s important to keep this in mind: emergency funds are for emergencies — and you get to decide what an emergency is. In fact, the time to do exactly that is now. Before there’s an emergency.

Take a few minutes (with your spouse or significant other if you share finances) and make a written list of the things you plan to consider an emergency. Put it in writing, and keep it somewhere you can refer to it easily. This will keep your emergency fund available for the things you’ve decided are true emergencies vs. being tempted to spend out of frustration, excitement at having a good amount available, or out of boredom on things like pizza. You’ll have worked hard to get it funded, so you’ll want to keep it that way.

As a bonus, creating this list will help you to identify things you that might feel like emergencies right now (because you don’t have the money handy) but are actually more like eventualities that you can start building into your budget over time. (Such as planning for car repairs and maintenance if you own a car.) Once that happens, you can take them off your “emergency” list because they’ll be in your budget instead.

Step 5: Reach at least $1000 in your emergency fund.

By believing you can do it, picking a place to park your emergency fund, opening that savings account, and then funding it by cutting back and/or making more, you’ll be on your way.

Once you hit that $1000 emergency fund goal, celebrate! Dance around the room, make something you like to eat for dinner, or just plain tell yourself good job. It may sound dorky but it’s important to give yourself credit for taking charge of your financial future like this.

If it takes you longer than 90 days or you have setbacks along the way, remember that you are STILL ahead of where you were when you started. Any progress is a good thing!

And once you’re done? Don’t be upset if you do have to use your emergency fund. That’s what it’s for! Congratulate yourself on having the foresight to build one in the first place instead. Then use the same steps you used to create it in the first place to rebuild it again.

The idea behind the $1000 emergency fund goal

Followers of Dave Ramsey will already be familiar with the idea of a $1,000 emergency fund. (He calls it baby step one.) Building up a small emergency fund is what I recommend as well. (In fact, I think ANY amount you can save up to start with is a good idea.) The idea is to help folks stop borrowing money for small emergencies.

That $1000 is not meant to be your entire emergency fund forever; instead it’s part of the process of getting out of debt. (With the idea that a full emergency fund will be built later on.)

$1000 is a lot of money! (And not enough)

I remember the first time I heard about having a $1000 dollar emergency fund. My first reaction was “That’s it!? A thousand dollars?” But then about 5 seconds later I had a flashback reaction of “On the other hand, a thousand dollars is a LOT”.

So how can it be both a lot and not nearly enough? It’s a matter of perspective. When you’re in debt, or even just living paycheck to paycheck, even a hundred bucks can seem like a small fortune — let alone a thousand.

But once you’ve gotten a handle on your money and experienced a large emergency (like being out of work for months with no job prospects in sight), you realize just how little $1,000 might cover.

So that’s the paradox.

So why aim for a $1000 emergency fund?

My point of view is that $1,000 is doable for many people, although it may seem out of reach initially. You can use the tips above in step 4 and save up $1K fairly quickly with some hard work.

That way instead of resolving to get out of debt and then not having a penny to your name (because you put it all toward debt), when an emergency happens you have m-o-n-e-y to use. That thousand dollars makes a great a weapon against Murphy.

One of my readers Adam experienced just that:

“I remember the first time I needed a car repair after building up a $1,000 emergency fund. My gut reaction was a sense of dread and panic, because I couldn’t possibly think of how I was going to find the couple of hundred dollars I needed to get it fixed. My wife had to remind me that we had $1,000 stashed away for that very reason. It was incredibly liberating and calming to just be able to go to auto shop around the corner and have a fixed car in a few hours with no hassle and no worry.

I think that’s the big reason for the $1,000 baby step. It’s not much in the grand scheme of things, but it will cover many of the most common emergencies — a car breakdown or a doctor’s visit when you don’t have insurance, and it’s enough to replace or repair most household applies, including your stove, refrigerator, washer and dryer, and computers. And even if the unthinkable happens and a bigger emergency fell in my lap when I only have $1,000 set aside, I have a lot more options with $1,000 at my disposal than I do with none.”

That’s a whole lot less depressing than pulling out the credit card (that you just worked hard to pay down a little) and wiping out your hard work.

Easing the transition

Of course, it’s also a good idea to cut up your credit cards when getting out of debt. So having a $1,000 emergency fund gives you a little peace of mind. It helps ease the transition, and makes it less likely that you’ll keep a credit card “just in case”, because now you have money to use in those “just in case” situations.

And a funny thing happens when you have money. You know that the money is there for emergencies, but when an actual emergency occurs, many people find themselves reluctant to use the fund. Instead, they find other ways to come up with additional cash, ways that may not have occurred to them if they had an “emergency” credit card laying around the house.

So get started with building that thousand dollar emergency fund today. You’ll be so glad you did. Happy saving!

]]>https://www.jackiebeck.com/1000-emergency-fund-in-90-days/feed/11How to Stop Living Paycheck to Paycheck and Start Making Progresshttps://www.jackiebeck.com/stop-living-paycheck-to-paycheck/
https://www.jackiebeck.com/stop-living-paycheck-to-paycheck/#commentsFri, 08 Feb 2019 19:42:52 +0000http://www.thedebtmyth.com/?p=6284Wish you could stop living paycheck to paycheck? You’re not alone. According to the Brookings Papers on Economic Activity about 1/3 of Americans live paycheck to paycheck. That’s about 38 million folks who would be in trouble if they had to pay an unexpected bill or would be panicked if they lost a job. If […]

That’s about 38 million folks who would be in trouble if they had to pay an unexpected bill or would be panicked if they lost a job. If you’re one of those folks, you know it sucks. It’s scary to live on the edge, or to not understand why you just can’t seem to get ahead.

I know this because I used to be one of them. But it doesn’t have to stay that way. You can stop living paycheck to paycheck.

Here’s what it takes to change things.

Start with an objective look

First, you’ve got to step back and objectively figure out why you’re in this situation. That can be tricky, because most people assume they’re living paycheck to paycheck because they don’t make enough money.

Makes sense, right? Yet 2/3 of those 38 million people are middle class, with many making more than $41,000 a year. It’s by no means just the “poor” who are barely making ends meet.

If you’re one of those who in theory actually make decent (or even great!) money, but still can’t seem to stop living paycheck to paycheck, you might be beating yourself up about it too. Know that it’s what you do going forward that matters, not what you’ve done in the past.

No matter what your income, if you’re living hand to mouth, bringing in more money feels amazing. And making extra money certainly could help you stop living paycheck to paycheck. But it might not help as much as you think — unless you change a few other things too.

That’s why you won’t know what to do next until you figure out what happened. So start with an honest look at why you are living paycheck to paycheck.

Ask yourself these questions if you want to stop living paycheck to paycheck

Ask yourself:

What bills do I have to pay every month like clockwork, and how much are they?

What else do I usually spend money on? (Look at your recent spending online or at statements instead of just trying to remember this)

What kinds of expenses do I usually forget about or just hope don’t end up happening?

How much money do I bring home each month, and from what sources?

Do I have debt?

Do I have an emergency fund?

Look at your finances as if they belong to a stranger. Take a deeper look at what you found out. If you have trouble doing that, ask someone you trust to give you an opinion. Then actually give serious thought to what they say.

Before you can stop living paycheck to paycheck, you need to get clear answers to all of those questions.

The last two (about debt and an emergency fund) are extra important. Why?

Because owing money literally means you are spending an extra amount of your money every month to pay for things you’ve already bought. Things you may no longer even have. So getting out of debt will make a HUGE difference in the amount of money you have available every month.

And if you don’t have an emergency fund, that’s a big red flag. Everyone has emergencies. Everyone. It’s not unusual at all for your car to break down, to lose a job, to experience disasters, etc. So you need money waiting for those things. That means you need to do everything you can think of to get money set aside for emergencies right away. As the #1 priority. Here’s how to build an emergency fund in 90 days or less.

What’s after that?

For now, reduce expenses where possible

I’ve been in the position where I’d already cut back really far. If you’re in that same place — living at or below the poverty line — don’t beat yourself up over it, but do look deeper just to make sure.

And no matter what your situation, do what you can to reduce expenses wherever possible. (At least for now.)

What are your top expenses? Housing, taxes, food, transportation, childcare, and utilities (especially if you include cell phones, internet & cable) are usually way up there. How could you reduce each of those? What are you spending on but not really enjoying or using? What could you get for less?

Keep in mind that cutting a big expense will give you the most mileage. Could you move to a less expensive home or area? Rent out a room in your home? Do you have a car you could sell? Could you keep your existing car once you’re done paying it off instead of buying a new one? (The answer to that last one is yes, and I highly recommend it.) Or maybe you could cancel cable and make your kids pay for their own cell phones if they want to keep them. (This will not kill them.)

Having a hard time knowing where to cut back?

Try asking yourself this: If I absolutely had no other choice (say, in order to save a loved one’s life) what expenses could I cut out or reduce? Even if I really don’t want to or can’t immediately think of a way that it would be possible or convenient. Remember, you’re saving a life. What could go on the chopping block? Rank those puppies in order of easiest to hardest to do.

The changes you make now don’t have to be forever, which can make them a lot easier to swallow. The idea is to do everything you can to get yourself into a better financial position.

Think about making more money

Of course, you can also work at bringing in more money. If you’re making minimum wage or an entry level salary by all means do what you can to increase your income. Ask for a raise, look for a better job, or make money on the side.

But don’t add to your expenses in order to make more money.

If you want to go back to school, find a way to do it with cash, grants, scholarships, or employer-paid schooling. The goal is to stop barely making ends meet, not make it harder (even short-term) to do so.

Use the one-two punch to stop living paycheck to paycheck

The one-two punch of cutting expenses and increasing income will give you the boost you need to make these life-changing money moves:

Start paying off debt if you have it. (Paying off your first debt will free up more money, and you’ll really start to feel some relief.)

Once you’ve moved from the paycheck-to-paycheck life to the conscious-spending & saving life, you’ll be motivated to continue improving your money situation. (You know, preparing for retirement, spending more on the things that matter to you, etc.)

Remember, changing your financial situation will take time, but most awesome things do.

]]>https://www.jackiebeck.com/stop-living-paycheck-to-paycheck/feed/2Emergencies and Disaster Preparedness: How To Prepare Your Familyhttps://www.jackiebeck.com/emergencies-disaster-preparedness/
https://www.jackiebeck.com/emergencies-disaster-preparedness/#respondTue, 05 Feb 2019 02:52:20 +0000https://www.jackiebeck.com/?p=17034Emergencies may not be high on the list of things we love to think about, but emergency preparedness is critical. Before we get started with things you can do to create an emergency preparedness plan, here’s a quick emergency definition: Simply put, an emergency is a sudden (and often unexpected) event that needs immediate action. […]

]]>Emergencies may not be high on the list of things we love to think about, but emergency preparedness is critical.

Before we get started with things you can do to create an emergency preparedness plan, here’s a quick emergency definition:

Simply put, an emergency is a sudden (and often unexpected) event that needs immediate action. This could be anything from sudden money problems to an earthquake, and everything in between.

Why plan now?

While no one wants to think they could lose their health, home, or job, ignoring the possibility doesn’t help. It only makes you wish you had prepared if something does happen.

To help with that, this article will cover many kinds of emergencies, broken down by types of emergency. It’ll provide examples of emergency situations, things you can do to prepare, and ideas for an emergency kit bag too. (It’s chock full of information, so pin it now so you can come back to it again later too!)

You’re already ahead of the game by looking into emergency preparedness. Give yourself a pat on the back for that — then read on to take the next steps.

Where to start when preparing for emergencies

Keep in mind that you don’t have to prepare fully for every possible emergency situation right away. Or at all, if there are some types of emergencies that would be extremely unlikely in your case.

Prepare a little bit at a time, starting with the most likely types of emergencies that might happen.

But do start now. (Even if that just means buying a little extra food that won’t spoil the next time you go to the grocery store.)

How to know what types of emergencies to prepare for

Think about what types of emergencies you want to prepare for. Emergency types can be broken down into the following major categories:

Common

Fairly likely

Unlikely

I’ll go over each of the categories next, and then go into what you can actually do about each of them later. To help with that, I’ve included links to useful sites and products. (A few are affiliate links. Here’s what that means if you’re curious.) Finally, I’ll end with a fairly robust emergency kit list.

Common emergencies

Common emergencies are things that are likely to happen to most people at one time or another. (And sometimes multiple times.)

Chances are everyone will experience one or more of these. Since that is the case, you’ll definitely want to be ready for them.

Fairly likely emergencies

Fairly likely emergencies include natural or man-made local disasters. The likelihood of each one happening will vary depending on where you live. You’ll want to prepare for the kinds of emergencies that are most likely to happen in your specific area.

The American Red Cross has a handy map to help you find common types of disasters in your area. Click here to check out the map. Make a note now of the ones you need to prepare for, so you can make suitable preparations.

Here are some examples of emergencies that could happen in certain areas:

wildfires

heat waves

extreme cold

floods

hurricanes

tornadoes

earthquakes

volcanic eruptions

mudslides

tsunamis

nuclear reactor accidents

industrial explosions

etc.

How likely they are to happen for you depends mainly on where you live.

Plus of course there are fairly likely emergencies that could happen anywhere. Those include things like:

house fires

shootings

power outages

medical

While no one wants any of those things to happen, sadly they do all take place fairly often.

Don’t get stuck wishing you’d made even the most basic effort to prepare for them. Some of the things you can do are free, or just take some time. So it’s worth at least a little bit of getting ready no matter what.

Unlikely emergencies

Unlikely emergencies are just what they sound like: SHTF / zombie apocalypse level stuff. That can include war, major terrorism, and domestic unrest. Basically, all of the disaster survival stuff you can’t even get insurance for. Serious preppers will be concerned about these types of things as well, and take action.

I’m not going to go into that here because I don’t know anywhere near enough about it. But these two articles seem like good starting points if you’re interested in that:

How to prepare for common emergencies: Basic things everyone should do

How much prepping you want to do for potential emergencies is up to you, but everyone should do at least SOME. Remember too that some of the emergency preparation you can do is absolutely free. It just takes some time and thought.

Hope for the best and prepare for the worst is very good advice. It doesn’t hurt at all to make some simple preparations. You’ll be very glad you did if you ever experience one.

At a bare minimum, it’s a good idea to have the following in your emergency kit:

A two week supply of water (one gallon per person per day, plus extra for pets)

A two week supply of non-perishable food (for both humans and pets)

At least a week’s supply of any prescription medicine (a bigger stockpile is better if doing without would mean you might die)

A first aid kit

Some cash on hand in small bills

You’ll also want the following:

Money you can access online or out of the area

At least a half-full tank of gas if you have a car, and a plan for leaving the area if you don’t

Why include these items in your basic emergency kit?

Let’s talk about why it’s important to include each of those items in your basic emergency kit. (I’m using emergency kit in a broader sense here, since these items won’t all literally fit in a bag.)

Water and food

Water and food are pretty self-explanatory, since we all need them to live. You don’t want to be the one rushing to the store right before the big storm, not able to cook because the power is out, or worst of all, stuck without the basics if it takes weeks for help to arrive. And it can take weeks in some cases, and even longer to restore electricity, roads, etc.

When it comes to how much to have saved up, remember that ANY amount is better than nothing. I like to have at least a year’s worth of expenses set aside. But don’t let that put you off if it sounds like a lot. Just choose an amount that feels right to you. (Many people do anywhere from 3 months salary to a year’s worth of expenses.) Again, ANY amount is better than nothing.

It matters because you could:

lose your job

get furloughed or get paid late

become temporarily disabled

have issues with your business income

need to pay for hotel stays during evacuation

need to pay for other sudden, large expenses, etc.

Having money you can use makes things a little easier.

Gas & a way out

If you have a car, keeping your tank at least half full at all times is a good idea. It’ll be easier to get out of the area in a hurry if need be. While a full tank of gas is even better if you need to evacuate, half a tank means you don’t have to stop at the very first gas station before you can do anything else. And if nearby stations are out of gas, you’ll have a chance of making it to a more distant one.

Sure, it can be annoying to have to get gas more often, but it’s better than running out. Plus, if you need to drive somewhere quickly for a smaller emergency, you’ll be ready to go without delay. (For example, a trip to the hospital if a loved one breaks their arm.)

If an evacuation seems likely (such as if a hurricane is headed your way) fill up your tank right away. Don’t wait for the possible evacuation to become a reality.

If you don’t have a car, make a plan now for ways you could get out of the area. For example, taking advantage of any possible government services, arranging that you can ride with neighbors, etc.

An in-case-of-emergency binder or file

This is a record of everything you need to know to run your household. Having an in-case-of-emergency binder or file (plus a copy stored off site) can make life so much easier.

For example, if something happens to the person who usually pays bills, someone else can take over. If your house burns down in a fire, you’ll still have your important information saved. If you have to evacuate, you’ll have phone numbers and addresses available so you can can reach out to others. (To check on them, let them know you’re ok, get help, file claims, etc.)

It has a place for everything you need to make tough times just a little easier for your family. (Even some stuff you may not think of!)

Medical ID information

This is medical info that can be viewed by EMTs, emergency room workers, etc in case you are hurt and can’t speak or think straight. This is important because it can help them treat you and avoid problems.

You can go the traditional route of wearing medical id jewelry, which is good because it’s more likely to stick with you in an accident.

Or you can use your smart phone’s Medical ID feature if it has one. (Or both.) For iPhone, it’s easy to take care of. You just type your medical information into the built-in Health app. Then emergency workers can access it even if your phone is locked.

It varies on how to do the same on Android and other kinds of phones. This article has good info on ways to do that for many types of phones.

Good insurance

It’s up to you what risks you want to insure against, and how much insurance you want. But it’s a great idea to have good health insurance if you can get it, and property insurance that includes replacement value. You can often insure for everything under the sun — but it does depend on where you live and how much you’re willing to pay.

Make a note in your calendar to update all insurance policies once a year to make sure there’s still enough coverage. For example, the cost to rebuild your home and the value of your house may increase. If that happens, you might need more insurance.

Be sure to take photos of every room in your house (open drawers & cupboards too) so you have a record of what you own. Here’s how to do a home inventory for insurance. That way things will go easier if you do need to use the insurance.

How to prepare for fairly likely emergencies

Once you have your basic emergency kit done (or sooner if need be) get ready for more specific emergencies that could happen in your area.

For example, we live in a desert. Deserts are very dry of course, but when it does rain there can be flash floods. Since we know that can happen, we have sandbags and flood insurance.

We also live in a major city, so there could be shootings or road rage. So while I feel a little silly doing it, I carry a CELOX traumatic wound first aid packet in my purse to be able to stop bleeding quickly.

Medical problems are fairly likely too, so maybe you want to learn CPR. (Courses are probably offered where you live. Or here’s a free online CPR course.)

Maybe hurricanes hit where you live, or tornados, or extreme cold. Once you find out what might happen, put them in order from most likely to happen to least. Then you can start getting any supplies together in that order.

How do you find out what’s common in your area? You can use the Red Cross natural disasters map linked to earlier, search your city & state websites for emergency plans, ask neighbors that have lived in the area for years, etc.

How to prepare for some of the most likely disasters

This is one area where the government has put a lot of time and research into. So rather than trying to reinvent the wheel I’ll leave you these helpful links.

Are You Ready? – This 204 page guide has a family communication plan, disaster supplies checklists, and guidelines on handling pretty much every type of disaster you can think of.

Ready.gov – Kind of a choose-your-own-disaster site with info on preparing for multiple disasters

There are many other sites with specific tips out there — I’ve just listed some of the more useful ones here.

Additional tips on emergency preparedness

Thankfully, my own major emergencies have been (mostly) limited to the financial kind: losing a job, unexpected medical expenses, etc. Because of that, I wanted to talk with folks who’ve lived through a wider variety of emergencies. Learning from the direct experiences of others is always good!

So I asked fellow bloggers this: “If you’ve lived through an emergency, what are some things you wish you’d known or done ahead of time?” Here’s what they had to say.

On house fires:

“I experienced a house fire, and I wish I had known how important it would be to know all of my items in my house. I also wish I had known the cost of everything we owned. Or how critical it could have been to have a fire escape plan for my children’s upstairs bedroom.” –Lacy Estelle, Michigan, of LacyEstelle.com.

“We had our house burn down while we were on vacation. Having documents and photos backed up online or outside of the home is a must. We backed up our photos on a external hard drive next to my computer. I always thought that in case of an emergency, I could just grab the hard drive and go. Who would have thought I wouldn’t be home to do that?” –Julie Gropp, Colorado, of Our Provident Homestead.

On being in an active shooter situation:

“I was in a mall shooting. I was in a movie theater when an active shooter began killing people in another store at the mall. Later they discovered he had planned to shoot the theater up but someone had moved the cell phone he had used to prop open the emergency door to the theater. I wish I had more situational awareness training. I recall immediately after the shooting that I wished I had a pistol and concealed carry license. Also I wanted to know what actionable steps I should have taken in the situation I was in.” –Barb Hudson, Washington, of Making It Home.

On hurricanes and tropical storms:

“Had more backup phone chargers. A phone’s power goes out quickly when you’re using it a lot, and it charges very slowly in an idling car. Plus, if the wi-fi goes out and you need to use your phone has a hot spot, it uses power even faster.” –Teresa Mears, Florida, publisher of Living on the Cheap.

“One thing I wished I had but didn’t was a battery-operated weather radio. In a power outage, that can be invaluable.” –Gerri Detweiler, Florida.

“We’ve been prepping for hurricanes for nearly 30 years. (Hurricane Iniki in 1992, Hurricane Flossie in 2007, and Hurricane Lane in 2018.) The only thing we’ve really improved in the last decade has been doing a thorough review of our plan at the start of hurricane season (June on Oahu)— and then starting my hurricane checklist at the 96-hour point instead of the 48-hour point.” –Doug Nordman, Hawaii, of The-Military-Guide.com.

“We learned first hand how devastating a hurricane can be and how being prepared can make a huge difference both before, during and after the storm. Having money set aside allowed us to evacuate before the category 4 storm, Hurricane Michael, hit and stay away until it was safe to return. It also allowed us to buy a SIM card and month of service on a new cell phone network that was still working after the storm knocked out Verizon and Sprint service completely, and to stock up on supplies out of town before we returned.

I can’t stress how important not worrying about money was after the storm. Some family members were without power and under a boil water notice for over two weeks, so having access to clean water and food you could eat without cooking it was key. If you’re ever in a major disaster area, finding gas can be extremely difficult. Be prepared to leave the immediate area and drive a couple hours to find an area with supplies where you can easily stock up. And remember, during these major disasters, your employer probably isn’t going to be up and running. If they can’t afford to pay you, you may go weeks or months without pay waiting for your employer to rebuild their business.” –Lance Cothern, Florida, of Money Manifesto.

On the aftermath of a suicide in the family:

“When my brother committed suicide, it was the most emotionally draining thing I had ever (and have ever) experienced. Managing the aftermath fell to me. Since I was in a different state and my sister was a mess, I decided to outsource everything I could including paying a family friend to sort through his stuff and another friend to move it to a storage unit until I had the energy to look through it (it took many years for that to happen). Outsourcing was something that had never occurred to me but it was the best thing I could have done and worth every penny.” –Jenny from Good Life. Better.

On blizzards and extreme cold:

“If you have older parents, you NEED to get them a power generator, especially if they live in a place where power goes out during the winter storms. Check it works every time you go visit them. This is so important that they have access to electricity at all times for medical equipment as well as heat in colder regions.” –Gabriel Kaplan, New York, of Wealth Habits.

“Extreme cold…we were renovating a 160 year old farmhouse…no windows (being removed to re-hang), no walls (stripped to clapboard so we could have electricity and insulation) and the next morning temps were 35 degrees F *below* zero. No wind chill so it was just cold. I told Dave (now deceased husband), ‘We need to heat and eat. A wood stove for heat, a gas stove for cooking and a well. If I have those three things I can take care of us.’ At the time we were living in the Appalachian Mountains of southwest Virginia. It’s easier to prepare for emergencies than be caught without a plan.” –Sandra Bennett, Virginia, of Thistle Cove Farm.

On flooding and tornadoes:

“I wish I had known to keep important documents and keepsakes in a water and fire proof safe. It saves tons of time, money, and worry to restore and recover your most important items. It would even be smart to stash a bit of cash to help you start your recovery, in case the worst happens.” –Lauren, Texas, of ThePracticalPenny.com.

“I wish I’d had flood insurance, and moved my two cars to the top of the driveway to higher ground so they wouldn’t be flooded and totaled.” –Maria Sibilla, New Jersey, of MariaSibilla.com.

What do these experiences with living through emergencies have in common?

If these stories all show one thing, it’s that emergency preparedness is SO important. Life’s disasters can happen to anyone. Remember that no matter what, the priority is taking care of yourself and your family. That always starts with a plan, communication, and emergency supplies.

So get started on preparing for emergencies today! You’ll be glad you did.

]]>https://www.jackiebeck.com/emergencies-disaster-preparedness/feed/0Closing Credit Cards: What You Need to Know Right Nowhttps://www.jackiebeck.com/closing-credit-cards/
https://www.jackiebeck.com/closing-credit-cards/#respondSat, 12 Jan 2019 17:45:56 +0000http://www.payoffdebtapp.com/?p=356Thinking of closing your credit cards? They can be HARD to give up. For many people, they’re a bit like a security blanket. Still, some people want to close a single card for various reasons. Some want to close all their cards so they aren’t tempted any longer. Others just want their debt GONE! That […]

]]>Thinking of closing your credit cards? They can be HARD to give up. For many people, they’re a bit like a security blanket.

Still, some people want to close a single card for various reasons. Some want to close all their cards so they aren’t tempted any longer. Others just want their debt GONE!

That explains why some of the most commonly asked questions when people first start getting out of debt are:

Should I close my credit cards?

Does it hurt your credit to close a credit card?

What about cancelling my oldest credit card – is it true you should never do that?

How do you cancel a credit card?

I’ll answer all of those questions and more below.

But before I do, there’s one thing you need to know about closing credit cards. When your focus is on getting out of debt, you have to do what’s best for you.

So, should you close your credit cards?

Let’s start with this, especially if you’re wondering about the pros and cons of closing a credit card. The short answer is: it depends on your goals, your situation, and how you’re currently using them.

You know your situation best.

If you just want to close a single credit card because you hate the annual fee, read on to that section. But if you are in credit card debt and struggling to get out, chances are the answer is yes. Especially if you continue to add to their balance, despite your goal of paying them off.

(Unless you’re about to borrow for a big ticket item like a house. You typically shouldn’t open or close any accounts or make any major purchases or unusual transactions in that case.)

If you’re struggling with credit card debt, at a minimum you should consider cutting them up. And if the thought of even just cutting up your credit cards fills you with anxiety, that’s a sign that you really should consider doing so. (You can read more about cutting up credit cards here.)

People commonly want to keep at least one card for emergencies, but you need family/friends and MONEY in an emergency. Credit cards are not money. They’re a means of payment that creates debt. So make building an emergency fund the priority if you don’t have a good sized one already.

Nail down your real goal first

Still using your the cards after cutting them up or freezing them? (You know, because you know the numbers or have them pre-populated online?) That’s a sign you should strongly consider closing your credit cards if you want to be debt free. (And you’re not about to borrow large amounts of money, like by getting a mortgage.)

Most people worry about the impact on their credit score of closing credit cards. That’s because they’ve been taught to hold their credit score in high regard so they can take out loans at lower interest rates. But if your goal is to get out of debt and stay out of debt forever, being able to borrow money at the best rates probably won’t matter all that much to you. (You know, since you don’t intend to borrow money again.)

If you’re going to be tempted to use your credit cards — even after you’ve cut them up — you’re probably better off just closing them altogether. You know yourself best.

If that’s the case for you, put your focus on actually getting out of debt. Stop stressing out about how closing credit cards might impact your credit score.

But does it hurt your credit to close a single credit card?

Usually at least a tiny bit. Closing a single credit card can hurt because the credit limit on that card is a factor in your score, and you’ll lose that impact. But I can tell you that closing one card of several generally just dings your score a little. (If you’ve got good or excellent credit.) That ding is usually temporary, so not typically anything to worry about.

or if you were right on the border between a good and not-so-good score.

Even then, the impact is usually temporary.

What about closing all your credit cards?

Closing ALL of your credit cards will likely hurt your credit more. It could hurt quite a bit, especially if any of the exceptions listed above apply to you. (For example, if they’re the only type of loan on your report — meaning you don’t have a car loan, student loan, mortgage, etc. on there too.)

However, there are plenty of good reasons for closing credit cards anyway, such as if…

You’re worried about possible identity theft issues.

You’re getting divorced and the cards are held jointly. (This is a biggie, because your ex could continue to use them otherwise.)

You got a notice that your interest rate will be increasing, and you want to opt out of the increase by the deadline.

You’ve learned that credit cards are not for you. (By carrying a balance, incurring late fees, drowning in debt, or experiencing other issues with them.)

You’re tired of annual fees or dealing with customer service issues.

Most importantly, you’re DONE with debt for good. (You probably already know that paying a ton of interest and being stuck in debt can hurt your wallet and ability to sleep.)

On a personal note, I cancelled all my credit cards back when my first husband and I got divorced, and didn’t reopen any again for years. While my score definitely went down a lot, it wasn’t permanent.

Closing all my credit cards was not the end of the world

I’m not one to monitor my credit score heavily — in fact the only times I usually saw my scores were when applying for a mortgage or a refinance (back when we still had debt) and they were always high.

But I checked mine now for this article and it’s 818 as of this moment:

I do use a couple of credit cards again now though, without ever carrying a balance. But I didn’t have any credit cards open for years prior to that, and we paid off all our debt years ago. (You can read our debt free story here.)

There are many people out there (like me) who’ve ended up closing all of their accounts at once due to things like divorce, and doing so is not the end of the world.

That’s because your credit score is based on your credit history — history which continues on as time goes by. Recent history counts for more than ancient history.

So remember that one thing and do what’s best for your situation, without being a slave to the credit industry.

About closing credit cards and your credit in general…

Also, you don’t just have one credit score. There are many scores that are used for various things — including multiple types of FICOs and the VantageScore. They’re all only snapshots in time; ones that are constantly changing.

More importantly, anything you do that’s related to debt or potential debt can have an impact on them. So if you’re afraid of closing a credit card, you should be afraid of the following things too:

Opening a credit card

Using a high percentage of your available credit limit

Paying late on a credit card

Having someone check your credit-worthiness with a hard inquiry

Applying for a card, or applying for a whole bunch of credit cards

and much more…

No one can tell you ahead of time exactly how doing any of those things will impact your credit score. Just remember that generally speaking, doing anything credit-related can change your score at least slightly, either positively OR negatively.

If you’re concerned about your credit…

If you’re concerned about your credit score overall, you may want to keep one revolving account (such as a credit card) open when possible. Or you could get a new one at some point in the future before the last revolving account you had in the past drops off your credit reports.

Dropping off your credit reports could take a while, because according to Equifax, “the account would stay on your…credit report for up to 10 years from the date it was reported by the lender as closed”. So you probably have some time before you’d need to be concerned about that.

Speaking of which, let’s debunk the common the “Never Close Your Oldest Credit Card” myth next.

Is cancelling my oldest credit card a bad idea?

You’ll often hear that you should never close your oldest credit card. Never is a strong word, and people are often mistaken about the reason behind keeping your oldest card open.

Nationally recognized credit expert John Ulzheimer discusses closing your oldest credit card in the video here. You can watch what he has to say, and I’ll summarize it the main points below too in case video isn’t your thing.

John explains that the myth is that “closing a credit card causes you to lose the value of the age of that card in your credit score, and that is absolutely not true.”

He adds:

“As long as the card is still on the credit report, not only does the credit scoring system still see the age of the card, but the card actually still continues to age, even when it’s closed.

So for example if you have an American Express card that you close today, it’s still going to be on your credit report, it’s still going to be considered in your score, the age of the card is still going to count, and a year from now that card is actually going to be a year older and all of that is going to still count.”

The bottom line? If you’re closing a single credit card, do so for other reasons like:

disliking it

getting rid of an annual fee

wanting to have fewer cards open

etc

John ends with this: “Don’t worry about the age of the card because it’s not a consideration you should focus on vis-à-vis your credit score and closing cards.”

Note: Don’t confuse leaving a card open with leaving debt on a card

You don’t have to keep carrying a balance on your credit cards just because they’re open. It’s OK to just cut them up and pay off the balance! (And you don’t have to carry a balance in order to improve your score.)

I repeat, you do not have to carry a balance. There’s no good reason to do that!

If you want to keep an unused credit card open and the company is threatening to close it if you don’t use it, you can always charge a tank of gas or something on it and then go right home and pay it off immediately so that you don’t build up a balance.

Finally, let’s end with this. How do you cancel a credit card?

How to cancel a credit card

Once you’ve decided to close a credit card, the right time to cancel it is usually whenever you feel like it. (Unless you’re planning to take out a mortgage in the next few months that does not use manual underwriting. In that case, you basically shouldn’t do anything that might negatively impact your credit scores.)

You can cancel a credit card even if it has a balance, so you don’t have to pay it off first. But if you can pay it off first, you probably should.

If you close a credit card when it still has a balance, your credit utilization rate will increase. (That’s not a good thing.) You will probably also lose any promotional interest rates, so the amount of interest you’re charged each month could go up.

So how do you cancel a credit card?

The steps to cancel a credit card are pretty simple:

Cancel any recurring charges to the card

Use any reward points associated with the card (unless you’ll be transferring those somewhere else)

Cut up the card

Pay the balance in full if possible

Notify the credit card company’s customer service department that you’d like the card canceled at your request. You can do this on the phone by calling their customer service number, and then follow up with a letter. Keep a copy of any letters you send.

Review your next statement to make sure the card is really closed.

If you still have a balance, make on-time monthly payments until it is gone.

The next time you review your credit reports, make sure the account shows as closed at customer request. (Be sure at least 2 months have passed first.)

I hope this guide on closing credit cards has been helpful. If you have additional questions, please leave them in the comments below and I’ll update it from time to time. And if you want to get out of debt, definitely fill out the form below!

Ready to get out of debt?

It all starts with a Debt Mindset Reset.

Enter your email now to take the (free!) 7-day email course. (You'll also get useful tips and ideas each week to help you stay motivated!)

]]>https://www.jackiebeck.com/closing-credit-cards/feed/0Want to Get Out of Debt Fast? Avoid These Classic Mistakeshttps://www.jackiebeck.com/get-out-of-debt-fast/
https://www.jackiebeck.com/get-out-of-debt-fast/#commentsMon, 31 Dec 2018 22:00:00 +0000http://www.thedebtmyth.com/?p=984Who wouldn’t want to get out of debt fast? Debt can be an enormous burden, one that weighs on you and holds you back from many opportunities. So of course, the quicker you can change that, the better. The only problem with that is, when your main goal is to get out of debt fast, […]

Debt can be an enormous burden, one that weighs on you and holds you back from many opportunities. So of course, the quicker you can change that, the better.

The only problem with that is, when your main goal is to get out of debt fast, sometimes you can lose objectivity or be tempted into things that aren’t such great ideas.

That means that often what seems like the slowest way is actually the fastest, and vice versa.

Classic mistake #1: Debt consolidation

A classic mistake is to try to borrow your way out of debt — often by turning to a debt consolidation loan. It sounds like a quick and easy solution, but it rarely turns out that way.

For one thing, you still owe the money. For another, it doesn’t cause you to change your habits, so you often end up going right back out and borrowing again. The same way you did before, except that this time you end up owing even more money.

And in the few instances where it does work, it’s often MUCH slower than the other methods of getting out of debt. So if you want to get out of debt fast (and do so for good) I’d avoid using debt consolidation. (Unless maybe you’re trying to get out of the payday loan trap.)

Classic mistake #2: Trying to make it all just go away

Another common mistake is believing that there are folks out there who can somehow just make your debts go away for you.

Debt settlement companies (also known as debt relief companies) typically claim that they can reduce your debt so you’ll only have to pay part of what you owe. They advertise heavily too, because it’s profitable. (You may even be seeing ads for companies like that on this page; because of interest-based advertising.)

Sometimes it’s actually true that you could pay only part of what you owe, but in those instances chances are that’s something you could do yourself as well. (Especially if you have medical debt.) For FREE, instead of paying a company to do it and potentially losing money and/or getting scammed.

So what IS the fastest way to get out of debt, other than waking up one day to find that you won the lottery?

I know that taking time to make changes is probably not what you were hoping to hear.

You just want to be DONE, right? Maybe you’re even thinking of declaring bankruptcy, because you just want to get it over with.

Those feelings are understandable. You want to start fresh. And you can. It just turns out that paying what you owe is usually the best way to get out of debt fast. That can be easier than you might think, and you won’t have to worry about being taken by unscrupulous characters.

Plus, you’ll be a whole lot less likely to go back into debt again. And isn’t that what you really want? To be debt free FOR GOOD? To never have to worry about owing money again?

What starting fresh really means

The fastest way to get out of debt doesn’t require a clean slate. Which is a good thing, because it’s impossible to truly have a clean slate. We’re all a product of our past, and that’s actually a good thing. It’s how we grow and improve.

Even if someone were to wipe out all of your debt right now, if you don’t change your behavior, you’ll be right back where you started from in just a few years.

That’s super important, so let me say it again. If you don’t change your behavior, you’ll be right back where you started from in just a few years.

Because when you keep doing what you have been doing, you keep getting what you have been getting.

Changing your money habits makes all the difference

Starting fresh really means changing your habits: the way you choose to handle money. And you can change your money habits and money mindset for the better starting right now. (Although it will require persistence and effort to make that change permanent.)

Changing the way you handle money is actually going to do a whole lot more for you than even winning the lottery would. That’s because making those new, improved habits will change the rest of your life for the better — not just today.

How to get control of your money — it could be easier than you think

The first step, of course, is to get control of your money. That means knowing where your money is going now, and figuring out where you actually want it to go.

Make your money behave. It may feel like it’s got a mind of it’s own, but it’s really just doing what you tell it to do.

If you tell it to fly out the window on outrageous interest payments every month, forever, it’ll do that. If you tell it to pile up until you’re ready to pull the trigger on some new furniture, it’ll do that too.

But you’ve got to tell it.

Making a plan for your money

That means making a plan for your money and then sticking to it. (See how to make a zero-based budget for details.) That may be a technical-sounding word, but the concept is actually simple:

You decide what’s most important for you to spend your money on. Then you spend it on that.

It’s true that making a budget means saying no to things you can’t afford. But it also means saying YES! to things that you can afford. And there’ll be more and more of those things you can afford as you get your debt paid off.

If you really want to get out of debt fast…

If you REALLY want to get out of debt quickly, it means putting a plan of attack into action. It also means being patient, which can be hard. But it is so worth it, and you’ll get inspired as you begin making progress.

Using the debt snowball method as your plan of attack can work wonders. The method keeps you motivated and you usually see progress quickly. It’s also very simple to use, and anyone can do it so long as you at least have enough money (in theory) to make minimum payments on all your bills.

You can set it up for free with just a piece of paper or a spreadsheet. If you want to obsess about it and really stay focused on your progress, I’ve got a debt app to help you with that.

You need a debt-prevention fund

There’s one more thing you need, and that’s a debt-prevention fund. Maybe you haven’t heard that term before, but I bet you HAVE heard it called an emergency fund.

An emergency fund will help keep you from going back into debt the first time something goes wrong. And things will go wrong. That’s how life is, for everyone. But an emergency fund can be there to cushion the blow, and it makes such a difference. When you use money you already have to pay for things, it costs you less too. (Because you’re not paying interest.)

]]>https://www.jackiebeck.com/get-out-of-debt-fast/feed/4Got Credit Card Debt? Avoid This One Huge Mistakehttps://www.jackiebeck.com/credit-card-debt-not-an-expense/
https://www.jackiebeck.com/credit-card-debt-not-an-expense/#respondTue, 18 Dec 2018 17:50:56 +0000http://www.thedebtmyth.com/?p=1766If you’ve got credit card debt, chances are you’re making this huge mistake. But don’t worry — fixing it will go a LONG way toward helping you turn your finances around. What is it? Simply put, it’s thinking of credit card debt as a bill. Why you should never make this mistake It’s pretty common […]

Unfortunately, I see budgets all the time with things like “Credit cards $200″ listed as a line item. Budgeting that way makes it difficult to track what you’re actually buying, and easy to mask areas where cutbacks might be possible. (If only you know where your money was going.)

Because it’s what you’re buying that matters, not the method of payment you’re using to buy it.

When you know what you’re actually doing with your money (vs just knowing that you charged a lot on the credit card last month) you can make different choices.

Knowing what you’re doing with your money makes a difference

You can choose to only spend money you already have, and to only buy things that you actually get value from.

In other words, you can create a budget that works for your life. (And actually have the money to do and buy those things!)

Considering credit cards an expense makes budgeting harder

Confusing credit cards with an expense makes it difficult when people try to create a budget.

They plan on a certain amount for various expenses, and then a certain amount for their credit card payment. Then they charge things to their card, and wonder why their credit card minimum payment is more than they’d planned on.

It’s better to budget for the things you’re buying, regardless of how you pay for those items.

Quit using credit cards altogether, and things get even easier.

Why quit the cards?

When you’re working on paying off credit cards, the easiest thing to do is to stop using the cards altogether. Period.

I know, you can get rewards by using credit cards. You can also end up paying a ton of interest, more than cancelling out any rewards.

It may surprise you to know that I’m not unilaterally against credit cards. I use them all the time — now that I absolutely, ALWAYS pay them off in full before they are due.

But I didn’t use them at all for many years, because I couldn’t seem to do that without going into debt. A ton of people can’t.

If you’re in credit card debt right now, that means YOU are one of the many people who can’t handle using credit cards. (Sorry, but that’s an easy way to tell.)

Don’t feel ashamed, but do stop using them (at least temporarily) if your goals is to get out of debt.

Make credit cards a temporary line item

While you’re paying off the cards, I’d suggest creating a temporary line item in your budget that says “Credit Card Debt” — a line item that you use to indicate the payments you’re sending to that debt to pay for the things you’ve already bought in the past.

Things you may not even remember at this point.

Once you’ve paid them off, you can eliminate that credit card debt line item entirely. For good. (Whether or not you decide to use a credit card in the future.)

It won’t need to be there any longer, because once you’ve paid them off, you’ll be doing your budgeting based only on the things you’re currently spending your money on.

And credit card debt won’t be one of them.

Ready to get out of debt?

It all starts with a Debt Mindset Reset.

Enter your email now to take the (free!) 7-day email course. (You'll also get useful tips and ideas each week to help you stay motivated!)